Tag: Medicare fraud

The Efficiency of Fraud

Remember, friends: Medicare is the model for how we should reform healthcare. Medicare for all is what Van Jones Propaganda Party, among others, is demanding.

On Tuesday, a jury found Iruke, his wife and an employee who worked for the couple guilty of healthcare fraud and conspiracy to commit fraud in a scheme that involved more than $14 million in illegitimate Medicare claims.

Authorities said Iruke and associates often supplied power wheelchairs to Medicare patients perfectly capable of walking on their own —including one who did jumping jacks to show agents he never needed one. Also among the patients Iruke and his associates filed reimbursement claims for were two people who were deceased, according to court papers.

fter purchasing the wheelchairs at about $900 wholesale and paying for the prescriptions, he pocketed the remainder of about $6,000 in taxpayer money he received as Medicare reimbursements, according to court documents. The pastor operated four medical equipment supply companies between May 2002 and September 2009 as part of the scheme, according to authorities.

A few things to pull out of this. First, how easy it was for these guys to defraud Medicare. Their fraud was so simple and straight-forward but it took the government seven years to spot it. The Feds are boasting about finding $2.3 billion in Fraud with their new strike force. But it’s clearly this is the low-hanging fruit of a crime spree that amounts to tens of billions. Notice also how efficient Medicare is. Surgeons haven’t had price increase in 30 years. But Medicare is shelling out six times the going price for a wheelchair.

This is just another illustration of how dysfunctional the liberal model for healthcare is. As I have argued here and Reason argues here, Medicare isn’t efficient, even if you ignore the massive fraud they tolerate. When you include it, Medicare becomes a boondoggle of epic proportions.

About That Efficient Medicare

Medicare is wonderfully efficient. It spends so much less on administration than those evil … what was that?

Much has been said about the growing gap between the program’s spending and revenues — a gap that will widen as baby boomers retire — but little attention has been focused on a problem staring us in the face: Medicare spends a fortune each year on procedures that have no proven benefit and should not be covered.

Read the whole thing. Medicare routinely pays for diagnostic tests at ages long past when those tests are useful and procedures that have been shown to have limited effectiveness. They are estimating that Medicare spends between $75 and $150 billion unnecessarily. I have no idea how this overlaps with the $50-100 billion they spend on fraud. Let’s just take a happy medium — say that fraud and waste cost the taxpayers $100 billion a year, 20% of Medicare’s budget. That’s what we get for those “low administrative costs” (which aren’t really so low).

Only part of this waste is from a lack of review. Another part is because Congress simply refuses to do anything about it. And the Democrats are already trying to disable the cost controls Obamacare put into the Medicare system. Less than a year later and they’re weaseling out of any restraint on how much healthcare seniors can use. As is usual these days, the media reports this problem as “unexpected” even though people like me (and the CBO) totally expected it.

Ezra Klein ran a graphic the other day showing that all the world’s socialized medical systems spend less than we do. But this is only true because those nations — which are much smaller and have more centralized authority — have the guts to actually ration care. Our Congress has demonstrated no such ability and its doubtful that they can. America is not Europe.

I’ve said for a while now that the most dangerous thing about government healthcare isn’t that it will ration care; the most dangerous thing is that it won’t and will drive us to bankruptcy. Well, looks like we’re headed down that path.